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GST Impact on Wedding Season: Jewellery, Clothes, Photography, Venue to Cost More – ASSOCHAM
The repercussions of demonetisation and Goods and Services Tax (GST) rollout might impact the oncoming wedding season in India, ASSOCHAM said in a statement today. The increase in prices after these economic policies were put into effect is expected to affect wedding services by 10-15 per cent this year, the industry body predicted.
“The factors attributed (that will impact wedding services) are demonetisation together with Goods and Servies Tax (GST) are likely to impact the upcoming wedding season in India as people will have to shell out more on buying jewellery and apparels, at salons and beauty parlours, photography, even for hiring venues like hotels/marriage palaces, courier and other related services,” ASSOCHAM said in its paper.
As per estimates by ASSOCHAM, the average cost of services like shopping, tent booking, catering , etc has gone up post-GST rollout as most of them attract higher GST rates between 18-28 per cent, which was not the case earlier. “Before GST, most of the wedding service businesses like tent services, confectionery booking, etc., were using unregistered bills on which they didn’t have to pay any tax, adds the paper,” ASSOCHAM stated.
In the paper, ASSOCHAM has listed certain articles which are associated with marriages and attract high GST rates. Footwear priced above Rs 500 attracts taxes at a “whooping” 18 per cent, whereas tax on gold and diamond jewellery has been hiked from 1.6 per cent to 3 per cent under the uniform indirect tax regime. Holding a marriage ceremony in a five-star hotel attracts 28 per cent GST, whereas event management outfits will have to be paid 18 per cent GST for their services, same as booking a marriage hall or garden for the ceremony.
“Everyone from those in entertainment to decor, beauty clinics, cosmetic giants, travel, tourism and even matrimonial web sites are making money out of marriages. Even foreigners, who want to solemnize their marriage in India, contribute to the Indian wedding industry,” ASSOCHAM said in the paper.
On the other hand, destination wedding or the wedding tourism sector in India is not likely to face much difficulty on the account of GST and demonetisation. Destination wedding it is already a very costly affair as it is, and gets most of its customers from groups like foreigners, NRIs, rich and famous people looking to have an exotic wedding ceremony at beaches, royal palaces, adventurous places, the ASSOCHAM paper said.
Wedding tourism sector, however, contributes even less 10 per cent of the entire wedding industry in India which is worth around Rs 1 trillion and is growing at rate of 25 to 30 per cent annually. The estimated cost of a wedding in India, including all expenses, could range anywhere between Rs 3 lakh to Rs 8 crore, with people spending one-fifth of their entire wealth on an average during the ceremony. Families are now revising their budget to spare on a wedding, considering the cash crunch after demonetisation and increase in prices after GST rollout.